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  1. #1
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    3 habits that prevent traders from making profit

    Hi traders!

    Successful trading is often not about unique trading system, it’s about doing certain things over and over again, or I would rather say – not doing them. Many beginner traders often do the same mistakes over and over again and if you would simply avoid what they do (or even do the opposite), you would get an edge on the market.

    I created my own TOP-3 list, you can add some more in commentaries to this post. I haven't uncluded money managent here, just chart patterns (market behavior) that traders fail to read properly.

    Selling «expensive» and buying «cheap»

    Most popular version of this principle is «buying bottoms» and «selling tops». When price suddenly breaks out from some range (say, to the upside) and starts to move rapidly, most traders will sell against this rally. That’s an instinct. If we’ve seen before small volatility and absence of significant price action to whatever side, we tend to deny breakout, we treat to new prices as «unfair» and rush to open a trade. Why in this case most traders are in hurry? They thing that current price action won’t long last and price will quickly drop back to the previous trading range.

    Look at yesterday’s example of NZDUSD:

    Attachment 10474

    It has rallied heavily, and believe me – there were many traders caught in short positions. Price has finally moved back to day opening, but I’m not sure that any short-sellers could benefit from that movement. You can’t enter short position (or long position, any position) if you don’t know your risk, if you are unable to calculate or estimate it. You can, of course, but it won’t be low risk trade, your risk will not be defined (don’t tell me that you know your risk because you have your stop-loss)

    So, in most cases shorting against such rally can be only reasonable when market is overbought and ready to liquidate to the downside. Such situations are pretty rare and this topic goes beyond our post.
    To avoid catching tops and bottoms, I recommend to switch between timeframes from time to time.
    What is cheap for one timeframe trader, may be expensive for other timeframe trader.


    Catching the «whipsaw»

    The second habit of beginner traders is to be aggressive after big price swings. Let’s say, we had news announcement and market reacted emotionally, We can see whipsaw with significant volatility.
    Most traders, who are bored with previous low volatility, think that market is going to move now more rapidly, more aggressively.
    But truth is that often market consolidates for 2-3 days after that, nothing happens, volatility goes down again. It’s very easy to be caught in such price action.

    Attachment 10476


    «Trading near support» (resistance)

    Third habit is too much reliance on horizontal lines that are considered to be support or resistance. In fact, support and resistance are often areas, not lines. I mean, real support and resistance areas, not local levels where day traders put their positions.
    When support/resistance «line» is already visible for everyone, it no longer provides good opportunity. Many traders can see those lines, they can calculate risk and they will enter either to the short or to the long side (trading breakouts or reversals) placing their stops beyond this line. So, a lot of orders will be concentrated near those lines, and market will not have reason to leave this level – the more liquidity it has near certain level, the less reasons it has to go away from it. The most expectable scenario is «whipsaw» near such «levels».

    Attachment 10475

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    Registered user taqiniazi's Avatar
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    As you said we should not depend more one the individual range like the assistance or the level of resistance at one cost because many periods the industry keep on varying between the area of the cost which is surrounded, so in that situation it is very necessary for you to consider that area and business when cost get out of the area.

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    Registered user lawners1791's Avatar
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    Quote Originally Posted by Value trader View Post
    Catching the «whipsaw»

    The second habit of beginner traders is to be aggressive after big price swings. Let’s say, we had news announcement and market reacted emotionally, We can see whipsaw with significant volatility.
    Most traders, who are bored with previous low volatility, think that market is going to move now more rapidly, more aggressively.
    But truth is that often market consolidates for 2-3 days after that, nothing happens, volatility goes down again. It’s very easy to be caught in such price action.
    yes to work on further with the good confirmation of the different system by the use and the good return on the past work on the evaluation to defines of the better on the strategics to work on the entry of submission. to stay with the secure manage on avoid the unmanaged situation with the trading of improper analytics on returning signals.

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  4. #23
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    Careful looking on the trading system and the way the traders look for doing it is what matters so well here. There are things traders can not help without doing, but serious discipline is the key. In the case of the whipsaw of the market too, I have been a victim of trying to outsmarts because of the price chart looking.

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    While you reported we must not depend much more a person the person selection similar to the assistance or the level of resistance at a person Value because a lot of intervals the sector carry on varying in between the world of the fee that is surrounded, so in that condition it is rather needed for you to think about that region and business enterprise when cost get outside of the realm.

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  6. #25
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    maybe the words is right. buy cheap and sell high. but when will we know them ? then it will just lead us to bet, guess or predict for the market price because want to get the top or the bottom of chart. and at this level. we need the knowledge which will guide us to get the right place.

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  7. #26
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    Quote Originally Posted by cozard007 View Post
    Careful looking on the trading system and the way the traders look for doing it is what matters so well here. There are things traders can not help without doing, but serious discipline is the key. In the case of the whipsaw of the market too, I have been a victim of trying to outsmarts because of the price chart looking.
    that is the difficulty in forex. even we have the strategy, we need to know the exact time to enter the market. when we get the wrong time, then, we could be in floating loss for long time. and if we are too patient, we could be miss the opportunity. so, it is very hard for us to enter the market in correct time. i think we need the luck for entering to the market just in good time

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  8. #27
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    Quote Originally Posted by ngalapreceh View Post
    that is the difficulty in forex. even we have the strategy, we need to know the exact time to enter the market. when we get the wrong time, then, we could be in floating loss for long time. and if we are too patient, we could be miss the opportunity. so, it is very hard for us to enter the market in correct time. i think we need the luck for entering to the market just in good time
    I was building a system in this trade we will be able to make this trade must be in working hard and long process of developing a strategy or trading system then you do not ever force yourself in this trading strategy to learn the trade too much because it will make you be confused to explore the focus of the strategy because when you are confused and do not focus then you will not be able to understand well the strategy that you have learned

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  9. #28
    Registered user lawners1791's Avatar
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    the profiles with the chart on delivering the distincts of the patterns to request more on working with the good manage on the analytics that is to focus with the better approachment as the traders experience on managing the good plan by the past work on compliance, to refer further of the good precision with the decision on defining the use of the technics and strategics on the manage.

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  10. #29
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    Yes dear, I am agree with you, and I think it's so much important thing for every trader specially for newbies.because maximum time they start position agonist of trend which you explain in point 2, and it is very common problem. otherwise after news publish we can not control our emotional mind but it is very had habit so we need to avoid these.

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    Don't loss you hope.

  11. #30
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    Quote Originally Posted by lawners1791 View Post
    the profiles with the chart on delivering the distincts of the patterns to request more on working with the good manage on the analytics that is to focus with the better approachment as the traders experience on managing the good plan by the past work on compliance, to refer further of the good precision with the decision on defining the use of the technics and strategics on the manage.
    I only take my time to work with what i am doing in this market very well, and i do not let anything cause my to shift away from what i have planned for my trading. In this, it is a good things to have experience, it is experience that will do it alone for the trader, if not, you will be trading with no serious result.

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